Marchex, Inc. (NASDAQ: MCHX), which harnesses the power of AI
and conversational intelligence to drive operational excellence and
revenue acceleration, today announced its financial results for the
first quarter ended March 31, 2024.
Q1 2024 Financial
Highlights
- GAAP revenue was $11.6 million for the first quarter of 2024,
compared to $12.2 million for the first quarter of 2023.
- Net loss was $1.5 million for the first quarter of 2024 or
$0.03 per diluted share, compared to a net loss of $4.5 million or
$0.11 per diluted share for the first quarter of 2023.
Q1 2023
Q1 2024
GAAP Revenue
$ 12.2 million
$ 11.6 million
Non-GAAP Results:
Adjusted EBITDA*
$ (2.8) million
$ (0.4) million
*
Adjusted EBITDA for Q1 2024
includes approximately $235,000 of reorganization costs. Excluding
these amounts would result in Adjusted EBITDA totaling
$(171,000).
- Adjusted non-GAAP loss per share for the first quarter of 2024
was ($0.02) compared to ($0.08) for the first quarter of 2023.
Recent Business
Highlights:
- New Customer Traction and Existing Customer Expansion.
Marchex recently entered into a new relationship with one of the US
Auto industry's largest Auto OEM channel partners, which it
believes will contribute to incremental revenue growth as the year
unfolds. The company also signed a large Home Services customer to
an expanded multi-year agreement. The company continues to make
progress expanding its pipeline of opportunities across multiple
verticals.
- Conversation Volumes. Overall conversation volumes in
the first quarter were down modestly from 2023 fourth quarter
levels as some customers faced pressure due to overall
consumer-related macroeconomic factors and company specific
items.
- Product Innovation. Marchex recently announced that it
has launched its Sentiment Suite offering across multiple
application programming interfaces (APIs) following completion of
an extensive early adopter program with Fortune 500 companies and
other organizations. A key enhancement of Marchex’s conversation
intelligence platform, Sentiment Suite combines structured and
unstructured data to provide a comprehensive view and
categorization of customer emotions during conversations with
businesses.
“In the first quarter and so far into the second quarter, we
have continued to make substantial progress with the key
initiatives that will drive our business for the balance of 2024
and into the future, including our infrastructure, innovation and
go-to-market initiatives,” said Edwin Miller, CEO. “We are seeing
our sales pipeline gain momentum as everything we are doing is
building toward our future as a prescriptive analytics company that
leverages our industry leading vertical market data. We are highly
focused on accelerating our business and enhancing Marchex’s
overall growth and profitability, and we believe our current
progress is moving solidly in this direction.”
Business Outlook
The following forward-looking statements reflect Marchex's
expectations as of May 7, 2024.
For the second quarter ending June 30, 2024:
- Revenue is anticipated to increase to approximately $12 million
or more.
- Adjusted EBITDA is anticipated to improve and be better than
first quarter 2024 results.
“Despite the noted lower volumes in certain areas to start the
year, we believe that those factors should be more than offset by
our new sales wins, such as the recently added and expanded
customer relationships, as well previously won opportunities
ramping over the course of the year. In addition, we have seen
strong initial interest in our AI product pilots and are working to
convert those to full programs. The combination of these factors
reinforce our belief that we can and will grow sequential revenue
as we move forward in 2024, as well as see ongoing bottom line
progress. Furthermore, as our OneStack initiatives continue to
advance, combined with other technology cost-saving initiatives, we
believe we are well positioned to enable greater overall operating
leverage in the business. Additionally, as our growth initiatives
gain further traction, we believe we are in a strong position to
see ongoing improvements in profitability measures into the
future,” said Miller.
Management will hold a conference call, starting at 5:00 p.m. ET
on Tuesday, May 7, 2024, to discuss its first quarter 2024,
financial results and other company updates. Access to the live
webcast of the conference call will be available online from the
Investors section of Marchex’s website at www.marchex.com. An
archived version of the webcast will also be available at the same
location two hours after completion of the call.
About Marchex
Marchex harnesses the power of AI
and conversational intelligence to provide actionable insights
aligned with prescriptive vertical market data analytics, driving
operational excellence and revenue acceleration. Marchex enables
executive, sales and marketing teams to optimize customer journey
experiences across all communication channels. Through our
prescriptive analytics solutions, we enable the alignment of
enterprise strategy, empowering businesses to increase revenue
through informed decision-making and strategic execution. Marchex
provides AI-powered conversational intelligence solutions for
market-leading companies in many leading B2B2C vertical markets,
including several of the world’s most innovative and successful
brands.
Please visit http://www.marchex.com, www.marchex.com/blog or
@marchex on Marchex X (formally known as Twitter), where Marchex
discloses material information from time to time about the company,
its financial information, and its business.
Forward-Looking
Statements:
This press release contains forward-looking statements that
involve substantial risks and uncertainties. All statements, other
than statements of historical facts, included in this press release
regarding our strategy, future operations, future financial
position, future revenues, other financial guidance, acquisitions,
dispositions, projected costs, prospects, plans and objectives of
management are forward-looking statements. We may not actually
achieve the plans, intentions, or expectations disclosed in our
forward-looking statements and you should not place undue reliance
on our forward-looking statements. Actual results or events could
differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements we make. There are a
number of important factors that could cause Marchex's actual
results to differ materially from those indicated by such
forward-looking statements including but not limited to product
demand, order cancellations and delays, competition and general
economic conditions. These factors are described in greater detail
in the "Risk Factors" section of our most recent periodic report
and registration statement filed with the SEC. All of the
information provided in this release is as of May 7, 2024, and
Marchex undertakes no duty to update the information provided
herein.
In the event the press release contains links to third party
websites or materials, the links are provided solely as a
convenience to you. Marchex is not responsible for the content of
linked third-party sites or materials and does not make any
representations regarding the content or accuracy thereof.
Non-GAAP Financial
Information:
To supplement Marchex's consolidated financial statements
presented in accordance with GAAP and to provide clarity internally
and externally, Marchex uses certain non-GAAP measures of financial
performance and liquidity, including Adjusted EBITDA, Adjusted
OIBA, and Adjusted non-GAAP income (loss) per share. Financial
analysts and investors may use Adjusted EBITDA and Adjusted OIBA to
help with comparative financial evaluation to make informed
investment decisions. Financial analysts and investors may use
Adjusted non-GAAP income (loss) per share to analyze Marchex's
financial performance since these groups have historically used EPS
related measures, along with other measures, to estimate the value
of a company, to make informed investment decisions, and to
evaluate a company's operating performance compared to that of
other companies in its industry.
Adjusted EBITDA represents net
income (loss) before (1) interest, (2) income taxes, (3)
amortization of intangible assets from acquisitions, (4)
depreciation and amortization, (5) stock-based compensation
expense, and (6) acquisition and disposition-related costs.
Adjusted EBITDA is an alternative measure used by our management to
understand and evaluate our core operating performance and trends,
and management believes it provides meaningful supplemental
information regarding the company's liquidity and ability to fund
its operations and financing obligations.
Adjusted OIBA represents Adjusted
EBITDA adjusted for depreciation and amortization. This measure,
among other things, is another metric by which Marchex has
evaluated the performance of its business, to include being the
basis on which Marchex's internal budgets have been based and by
which Marchex's management has been evaluated. This measure
represents Marchex's consolidated operating results, taking into
account depreciation and other intangible amortization, but
excluding the effects of certain other expenses removed in arriving
at Adjusted EBITDA, as detailed above.
Adjusted non-GAAP income (loss) per
share represents Adjusted non-GAAP income (loss) divided by
GAAP diluted shares outstanding. Adjusted non-GAAP income (loss)
generally captures those items on the statement of operations that
have been, or ultimately will be, settled in cash exclusive of
certain items that are not indicative of Marchex’s recurring core
operating results and represents net income (loss) applicable to
common stockholders plus the net of tax effects of: (1) stock-based
compensation expense, (2) acquisition and disposition related costs
(benefit), (3) amortization of intangible assets from acquisitions,
and (4) interest income and other, net.
Marchex's management believes that investors should have access
to, and Marchex is obligated to provide, the same set of tools that
management uses in analyzing the company's results. These non-GAAP
measures should be considered in addition to results prepared in
accordance with GAAP, and should not be considered in isolation, as
a substitute for, or superior to, GAAP results. Marchex’s non-GAAP
financial measures may be defined differently from time to time and
may be defined differently than similar titled terms used by other
companies, and accordingly, care should be exercised in
understanding how Marchex defines its non-GAAP financial measures
in this release. Marchex endeavors to compensate for the
limitations of the non-GAAP measures presented by providing the
comparable GAAP measure with equal or greater prominence, GAAP
financial statements, and detailed descriptions of the reconciling
items and adjustments, including quantifying such items, to derive
the non-GAAP measure.
MARCHEX, INC. AND
SUBSIDIARIES
Condensed Consolidated
Statements of Operations
(in thousands, except per
share amounts)
(unaudited)
Three Months Ended
March 31,
2023
2024
Revenue
$
12,216
$
11,573
Expenses:
Service costs (1)
5,424
4,414
Sales and marketing (1)
3,970
2,787
Product development (1)
4,164
3,245
General and administrative (1)
2,617
2,289
Amortization of intangible assets from
acquisitions
531
151
Acquisition and disposition related
costs
13
—
Total operating expenses
16,719
12,886
Loss from operations
(4,503
)
(1,313
)
Interest income (expense) and other,
net
57
(78
)
Loss before provision for income taxes
(4,446
)
(1,391
)
Income tax expense
(30
)
(59
)
Net loss applicable to common
stockholders
$
(4,476
)
$
(1,450
)
Basic and diluted net loss per Class A and
Class B share applicable to common stockholders
$
(0.11
)
$
(0.03
)
Shares used to calculate basic net loss
per share applicable to common stockholders:
Class A
4,661
4,661
Class B
37,835
38,393
Shares used to calculate diluted net loss
per share applicable to common stockholders:
Class A
4,661
4,661
Class B
42,496
43,054
(1) Includes stock-based compensation
allocated as follows:
Service costs
$
45
$
3
Sales and marketing
263
88
Product development
86
8
General and administrative
405
333
Total
$
799
$
433
MARCHEX, INC. AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
December 31,
March 31,
2023
2024
Assets
Current assets:
Cash and cash equivalents
$
14,607
$
12,032
Accounts receivable, net
7,394
8,145
Prepaid expenses and other current
assets
1,805
2,298
Total current assets
23,806
22,476
Property and equipment, net
2,398
2,093
Other assets, net
1,482
1,488
Right-of-use lease asset
1,631
1,515
Goodwill
17,558
17,558
Intangible assets from acquisitions,
net
602
452
Total assets
$
47,477
$
45,582
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
1,533
$
1,455
Accrued benefits and payroll
3,294
1,565
Other accrued expenses and current
liabilities
3,217
3,607
Deferred revenue and deposits
1,214
1,916
Lease liability current
462
472
Total current liabilities
9,720
9,016
Deferred tax liabilities
249
276
Finance lease, non-current
421
340
Lease liability, non-current
1,217
1,096
Total liabilities
11,607
10,729
Stockholders’ equity:
Class A common stock
49
49
Class B common stock
386
389
Additional paid-in capital
356,666
357,096
Accumulated deficit
(321,231
)
(322,681
)
Total stockholders’ equity
35,870
34,853
Total liabilities and stockholders’
equity
$
47,477
$
45,582
MARCHEX, INC. AND
SUBSIDIARIES
(in thousands)
(unaudited)
Reconciliation of GAAP Net
Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before
Amortization (OIBA)
Three Months Ended
March 31,
2023
2024
Net loss applicable to common
stockholders
$
(4,476
)
$
(1,450
)
Interest (income) expense and other,
net
(57
)
78
Income tax expense
30
59
Amortization of intangible assets from
acquisitions
531
151
Depreciation and amortization
359
324
Stock-based compensation
799
433
Acquisition and disposition-related
costs
13
—
Adjusted EBITDA
$
(2,801
)
$
(406
)
Depreciation and amortization
359
324
Adjusted OIBA
$
(3,160
)
$
(730
)
MARCHEX, INC. AND
SUBSIDIARIES
(in thousands)
(unaudited)
Reconciliation of GAAP Net
Loss per Share to Adjusted Non-GAAP Loss1
Three Months Ended
March 31,
2023
2024
Net loss applicable to common
stockholders, diluted
$
(0.11
)
$
(0.03
)
Stock-based compensation
0.02
0.01
Acquisition and disposition-related costs
(benefit)
-
-
Amortization of intangible assets from
acquisitions
0.01
-
Interest income and other, net
-
-
Adjusted non-GAAP loss per
share
$
(0.08
)
$
(0.02
)
Shares used to calculate diluted net loss
per share applicable to common stockholders (GAAP) and Adjusted
Non-GAAP loss per share
42,496
43,054
1
For the purpose of computing the
number of diluted shares for Adjusted non-GAAP income (loss) per
share, Marchex uses the accounting guidance that would be
applicable for computing the number of diluted shares for GAAP net
income (loss) per share.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507344698/en/
For further information, contact: Trevor Caldwell Marchex
Investor Relations Telephone: 206.331.3600 Email: ir@marchex.com Or
MEDIA INQUIRIES Marchex Corporate Communications Telephone:
206.331.3434 Email: pr(at)marchex.com
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